Indian Hotels shares hit all-time high after Q2 profit soars 3.3x; brokerages upbeat

Indian Hotels (IHCL) shares are in focus in Friday's session (November 8) as the company's shares hit an all-time high price of Rs 722 per share after the Tata group company posted a better-than-expected Septenber quarterly results. For the review quarter, the company's adjusted PAT grew 49 per cent on-year to Rs 248 crore, in comparison to Rs 167 crore in the same quarter last year. Zee Business research estimated adjusted PAT to come in at Rs 232 crore. Likewise, PAT grew by a substantial 3.3 times year-on-year to Rs 555 crore from Rs 167 crore during the same period last year. This was more than double analsysts estimates at just Rs 232 crore.

The substantial increase in PAT is attributed to Rs 307 crore exceptional gain during the quarter on accounting TajSATS as the subsidiary of company. TajSATS is the joinnt venture between Indian Hotels Company Limited (IHCL) and SATS Limited,

Revenue from operation at the company also increased by 27.4 per cent during the quarter to Rs 1,826 crore in contrast to Rs 1,433 crore in the same period last year.

On the operational front, the company's EBITDA was at Rs 501 crore, up 41 per cent from the previous year's same quarter figure at Rs 355 crore with margin at 27.4 per cent. Analysts pegged EBITDA and EBITDA margin at Rs 444 crore and 26.9 per cent, respectively. 

In the same period last year, the company's EBITDA margin was recorded at 24.7 per cent, logging a year-on-year (YoY) gain of 2.7 per cent or 270 bps.

Also, the stock post its Q2 show has emerged as the top gainer in the derivatives market.

Here's how global brokerages view Indian Hotels stock post Q2

Jefferies has continued with its earlier 'buy' call on the stock and raised target to Rs 785 from the earlier Rs 690, implying gains of 15 per cent from the last close. The brokerage maintained that after strong Q2, further acceleration in earnings is expected in H2FY25. The brokerage highlighted that the company's primary hotel business continues to benefit amid cyclical tailwinds on demand-supply mismatch, with international business also faring well in Q2. The company's new businesses & expanding brandscape are adding to gains, added the brokerage.

Amid the demand outlook and expected growth, the brokerage has raised LFL EBITDA/PAT estimates by 2-4 per cent factoring in stronger RevPAR growth at 10 per cent for FY25 in contrast to 8 per cent earlier.

Meanwhile, Morgan Stanley has also maintained its 'overweight' rating with a Rs 759 per share target.